Ponzi Schemes

There is nothing new under the sun and unfortunately even if it is nefarious there are plenty of people who fall foul of schemes as old as the hills.

For example, the Ponzi scheme. Some of the first recorded incidents to meet the modern definition of Ponzi scheme were carried out from 1869 to 1872 by Adele Spitzeder in Germany and by Sarah Howe in the United States in the 1880s through the “Ladies’ Deposit”. Howe offered a solely female clientele an 8% monthly interest rate, and then stole the money that the women had invested. She was eventually discovered and served three years in prison. The Ponzi scheme was also previously described in novels; Charles Dickens’ 1844 novel Martin Chuzzlewit and his 1857 novel Little Dorrit both feature such a scheme.

So given the over 150 years since it appeared here in 2021 they are still going and people still fall for them in the hope of that quick or better than average return. Which it is for someone, often the perpertrator. Until they are caught and the investors lose most if not all their money. The following was reported in the Los angeles Times only 3 days ago.

Zachary Horwitz, an actor in low-budget horror and science-fiction movies, has agreed to plead guilty to running a massive Hollywood Ponzi scheme.

Horwitz, 34, admitted in court papers that he duped investors into giving him more than $650 million for fictitious movie deals with HBO and Netflix.

While Horwitz repaid much of the money in order to lure victims into investing more, he also spent large sums of it to finance his “lavish lifestyle,” according to his Sept.1 plea agreement with the U.S. attorney’s office in Los Angeles. Horwitz acknowledged that he has failed to repay $231 million.

Remember if it sounds too good to be true .. it probably is.

Cruzlaw.